Bowden v. Schenker

Filing 16

MEMORANDUM re Dft's Mtns to change venue 4 , to dismiss 6 and for Sanctions 9 (Order to follow as separate docket entry)Signed by Honorable Sylvia H. Rambo on 3/8/18. (ma)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
JERRA V. BOWDEN
Plaintiff,
v.
DB SCHENKER
Defendant.

:
:
:
:
:
:
:
:
:

Civil No. 1:17-CV-01999

Judge Sylvia H. Rambo

MEMORANDUM
In this diversity action, Plaintiff presents claims against her former employer
for misappropriation of ideas, unjust enrichments, and quantum meruit. Presently
before the court are Defendant’s motions 1) to transfer venue (Doc. 4); 2) to
dismiss the complaint pursuant to Rule 12(b)(6) on the basis of res judicata (Doc.
6); and 3) for sanctions against Plaintiff’s counsel for filing a frivolous complaint
(Doc. 9). For the reasons stated herein, Defendant’s motions to dismiss and for
sanctions will be granted, and its motion to transfer venue will be denied as moot.
I.

Background
Plaintiff filed suit against Defendant1, her former employer, in the United

States District Court for the Eastern District of Pennsylvania on March 21, 2016,
asserting, inter alia, claims of misappropriation of ideas, unjust enrichment, and
quantum meruit under Pennsylvania common law. Plaintiff’s claims stemmed from

1

The court notes for the record that Plaintiff erroneously named Defendant in the complaint as
“DB Schenker,” whereas Defendant’s actual name is Schenker, Inc.

Defendant’s introduction of an assembly line approach to certain of its operations
that relied on Plaintiff’s development of, what she referred to as, the “Productivity
Tracker.” On July 25, 2016, the Eastern District dismissed Plaintiff’s complaint in
its entirety with prejudice. See Bowden v. DB Schenker, Civ. No. 16-cv-1272,
2016 WL 3981354, *1 (E.D. Pa. July 26, 2016). Plaintiff timely appealed, and on
May 31, 2017, the United States Court of Appeals for the Third Circuit affirmed
the Eastern District’s decision, see Bowden v. DB Schenker, 693 F. App’x 157,
158-59 (3d Cir. 2017), and subsequently denied Plaintiff’s request for rehearing en
banc.
Despite the final judgment as to her claims, on October 2, 2017, Plaintiff
nonetheless filed a materially identical complaint in the Court of Common Pleas
for Cumberland County at docket number 2017-07277. Defendant notified Plaintiff
via telephone and email on October 13, 2017 that the complaint was claim
precluded and that Defendant intended to seek sanctions against Plaintiff’s counsel
if the complaint was not withdrawn. On November 1, 2017, Defendant removed
the case to this court (Doc. 1), and on November 8, 2017, Defendant filed a motion
to dismiss the case pursuant to Federal Rule of Civil Procedure 12(b)(6) on the
basis of res judicata (Doc. 6), as well as a motion to transfer venue to the Eastern
District of Pennsylvania (Doc. 4), together with supporting briefs. Defendant
served a letter on Plaintiff’s counsel on November 17, 2017, once again advising
2

him that Plaintiff’s claims were precluded and that sanctions would be sought if
counsel did not withdraw the complaint. Counsel for Plaintiff did not withdraw the
complaint, and on December 12, 2017, Defendant filed a motion, accompanied by
a supporting brief, seeking sanctions against him. (Docs. 9 & 10.)
Plaintiff filed a brief in opposition to the motion for sanctions on December
26, 2017 (Doc. 14), but has failed to respond to the motions to transfer and dismiss
for more than sixty days, and, thus, the court may grant those motions as
uncontested pursuant to Middle District Local Rule 7.6. (providing that “[a]ny
party opposing any motion . . . shall file a brief in opposition within fourteen (14)
days after service of the movant’s brief . . . . Any party who fails to comply with
this rule shall be deemed not to oppose such motion.”). Nonetheless, the court will
address each of Defendant’s motions on the merits.
II.

Motion to Dismiss
Defendant has moved for dismissal of the complaint on the basis of res

judicata, otherwise known as claim preclusion, which, although an affirmative
defense, may be raised in a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6). See Lewis v. Smith, Civ. No. 07-cv-2011, 2008 WL 3200836,
*1 (M.D. Pa. Aug. 7, 2008) (quoting Walzer v. Muriel, Siebert & Co., Inc., 221 F.
App’x 153, 155 (3d Cir. 2007)). Although the court must generally limit its review
to facts contained in the complaint when deciding a motion under Rule 12(b)(6),
3

“[t]he defense of claim preclusion . . . may be raised and adjudicated on a motion
to dismiss and the court can take notice of all facts necessary for the decision.
Specifically, a court may take judicial notice of the record from a previous court
proceeding between the parties.” Id. (quoting Toscano v. Conn. Gen. Life Ins. Co.,
288 F. App’x 36, 38 (3d Cir. 2008) (internal citations omitted).
“Claim preclusion, formerly referred to as res judicata, gives dispositive
effect to a prior judgment if a particular issue, although not litigated, could have
been raised in the earlier proceeding.” Bd. of Trs. of Trucking Emps. of N. Jersey
Welfare Fund, Inc. – Pension Fund v. Centra, 983 F.2d 495, 504 (3d Cir. 1992). In
order for a claim to be precluded, the party asserting the defense must show that
there was “(1) a final judgment on the merits in a prior suit involving (2) the same
parties or their privies and (3) a subsequent suit based on the same cause of
action.” United States v. Athlone Indus., Inc., 746 F.2d 977, 983 (3d Cir. 1984)
(citing I.A.M. Nat'l Pension Fund v. Indus. Gear Mfg. Co., 723 F.2d 944, 946-47
(D.C. Cir. 1983)). Whether two separately-filed lawsuits are based on the same
cause of action “turn[s] on the essential similarity of the underlying events giving
rise to the various legal claims.” Id. Rather than applying this test mechanically,
the court “should focus on the central purpose of the doctrine, to require a plaintiff
to present all claims arising out the same occurrence in a single suit.” Centra, 983
F.2d at 504 (citing Athlone Indus., 746 F.2d at 983-84).
4

Here, all the requirements are clearly met. A final judgment was handed
down by the Eastern District and affirmed by the Third Circuit, Plaintiff and
Defendant are the same parties as in the previous suit, and Plaintiff brings almost
identical claims – misappropriation of ideas, unjust enrichment, and quantum
meruit – as she alleged in her Eastern District complaint, which once again arise
out of her claimed invention of a “Productivity Tracker.” Indeed, more than a
dozen paragraphs in the two complaints are identical, and Plaintiff does not attempt
to allege any new material facts.
Plaintiff’s only argument against claim preclusion is that a final judgment in
a federal court does not preclude her from presenting the same claims in state court
to seek a determination from the Pennsylvania Supreme Court on whether
discovery should be conducted prior to dismissing claims similar to Plaintiff’s.
This position is both unsupported by the case law that Plaintiff cites, and flies in
the face of the well-settled rule applying the United States Constitution’s full faith
and credit clause of Article IV, § 1 to proceedings of federal courts. See In re
Stevenson, 40 A.3d 1212, 1225 (Pa. 2012) (citing Del. Valley Citizens’ Council for
Clean Air v. Pennsylvania, 755 F.2d 38, 43-44 (3d Cir. 1985) (“Pennsylvania
courts have long recognized the principle that state courts are bound by the
judgments of federal courts.”)). Plaintiff’s argument also ignores another wellestablished principle; namely, that “[i]n the absence of a reported decision by the
5

state's highest court addressing the precise issue before it, a federal court applying
state substantive law must predict how the state's highest court would rule if
presented with the case.” See Hittle v. Scripto-Tokai Corp., 166 F. Supp. 2d 159,
161 (M.D. Pa. 2001) (citing Nationwide Mut. Ins. Co. v. Buffetta, 230 F.3d 634,
637 (3d Cir. 2000)). Thus, even if Plaintiff believed that the federal application of
Pennsylvania law was somehow incorrect, that argument should have been
presented to the Eastern District to make a determination of how the Pennsylvania
Supreme Court would likely rule on the same issue. Simply stated, Plaintiff had her
choice of forum when filing her first complaint and could have chosen to file in
state court, but did not. She is now bound by the judgment of the Eastern District,
which was affirmed by the Third Circuit. Accordingly, the court finds that
Plaintiff’s claims are precluded, and her complaint will be dismissed with
prejudice.2
III.

Motion for Sanctions
Defendant has also moved for sanctions against Plaintiff’s counsel, Arnold

Alphonso, Jr., Esq. (“Mr. Arnold”), on the basis that Plaintiff’s claims were clearly
precluded and therefore frivolous. (See Doc. 9.) Counsel for Defendant notified
Mr. Arnold multiple times that the claims were precluded and that the filing of
such a frivolous lawsuit was sanctionable. On December 12, 2017, after Mr.
2

Because the court has opted to decide Defendant’s motion to dismiss on the merits and will
dismiss the complaint, Defendant’s motion to transfer venue (Doc. 4) is moot.
6

Arnold failed to withdraw the complaint, counsel for Defendant filed the present
motion for sanctions.
Pursuant to Federal Rule of Civil Procedure 11(b), when presenting a
pleading to the court, an attorney must certify that, to the best of his or her
“knowledge, information, and belief, formed after an inquiry reasonable under the
circumstances: . . . (2) the claims, defenses, and other legal contentions are
warranted by existing law or by a nonfrivolous argument for extending, modifying,
or reversing existing law or for establishing new law.” Fed. R. Civ. P. 11(b). For a
filing to be reasonable under the circumstances, an attorney must have “‘an
objective knowledge or belief at the time of the filing of a challenged paper’ that
the claim was well-grounded in law and fact.” Ford Motor Co. v. Summit Motor
Prods., Inc., 930 F.2d 277, 289 (3d Cir. 1991) (quoting Jones v. Pitt. Nat’l Corp.,
899 F.2d 1350, 1359 (3d Cir. 1990)). The objectivity of the well-grounded in law
and fact standard “requires the attorney to ‘conduct a reasonable investigation of
the facts and a normally competent level of legal research to support the
presentation,’” Howe v. Litwack, 579 F. App’x 110, 115-16 (3d Cir. 2014) (quoting
Simmerman v. Corino, 27 F.3d 58, 62 (3d Cir. 1994)), and the failure to do so
warrants sanctions. Rule 11(c) allows the court to impose appropriate sanctions
against the attorney responsible for the violation, which “may include nonmonetary
directives; an order to pay a penalty into court; or . . . an order directing payment to
7

the movant of part or all of the reasonable attorneys’ fees and other expenses
directly resulting from the violation.” Fed. R. Civ. P. 11(c)(4). District Courts have
broad discretion to impose attorneys’ fees and costs as sanctions, as appellate
courts “evaluate the [district] court’s factual determinations, legal conclusions, and
choice of an appropriate sanction with substantial deference.” Keister v. PPL
Corp., 677 F. App’x 63, 66 (3d Cir. 2017) (citation omitted).
As stated above, Plaintiff’s claims were clearly precluded by the judgments
of the Eastern District and Third Circuit. Any competent research into the claims
Mr. Arnold presented in the instant complaint would have revealed that they were
without merit. To make matters worse, the frivolousness and precluded nature of
the current claims were brought to Mr. Arnold’s attention on multiple occasions,
and he had every opportunity to withdraw his complaint. Accordingly, the court
finds that the filing of the complaint was frivolous and unreasonable under the
circumstances, and the court will impose the sanction on Mr. Arnold of paying
Defendant’s reasonable attorneys’ fees and costs in this matter.
IV.

Conclusion
For the reasons stated above, the court finds that Plaintiff’s claims are

precluded and that Mr. Arnold was unreasonable in filing the complaint. Plaintiff’s
complaint will be dismissed with prejudice, and sanctions in the form of reasonable

8

attorneys’ fees and costs will be imposed upon Plaintiff’s counsel.
An appropriate order will issue.

s/Sylvia H. Rambo
SYLVIA H. RAMBO
United States District Judge
Dated: March 8, 2018

9